Financial Network reported on April 29 that YTO Express (600233.SH) released its 2020 annual performance report and its first quarter performance report for 2021 last night. According to the financial report, in 2020, YTO achieved revenue of 34.907 billion yuan, a year-on-year increase of 12.06%; net profit attributable to shareholders was 1.767 billion yuan, a year-on-year increase of 5.94%; business completed volume was 12.648 billion pieces, a year-on-year increase of 38.76%, and a market share of 15.17%, an increase of 0.82 percentage points; the cost of a single ticket was 2.13 yuan, a year-on-year decrease of 18.12%, achieving the development trend of "three increases and one decrease" of revenue, net profit, share and cost.
It is worth noting that YTO's performance in the first quarter of 2021 was particularly impressive, with revenue of 8.96 billion yuan, a year-on-year increase of 61.91%, net profit of 371 million yuan, a year-on-year increase of 36.69%, and net profit after deducting non-operating items was 339 million yuan, a year-on-year increase of 44.81%.
scale and profits have increased, and the cost of a single ticket has dropped significantly. Behind the strong development from 2020 to the first quarter of this year, the results of YTO's series of cost reduction and efficiency improvement strategies have emerged. How to reduce
? Digital transformation empowers cost control
As we all know, my country's express delivery industry has been operating at extremely low prices for a long time, and "price war" is also one of the most effective means for express delivery companies to seize market share. An epidemic in 2020 further amplified the intensity of the "price war". In order to seek the fastest recovery and breakthrough, the unit price of express delivery continued to decline, from 13.24 yuan/order in January to 10.01 yuan/order in December. National Post Bureau data showed that the average express delivery price in the entire industry in 2020 was 10.55 yuan/ticket, a year-on-year decrease of 10.59%. Under fierce competition from
, the industry's prices are severely inverted, and major express delivery companies have lowered service prices, and YTO is no exception. According to the financial report, in 2020, the revenue of YTO single ticket express delivery products fell from 2.95 yuan in the previous period to 2.27 yuan, a decrease of 22.91%. At first glance, it seems to be a big decline. However, compared with express delivery companies that have disclosed financial reports in the same industry, YTO's single ticket revenue has fallen by the lowest in the industry. With intensified competition, the price of a single ticket is a general trend, but it is worth noting that this has not affected YTO's performance. The reason is not unrelated to YTO's fine cost control.
According to the annual report data, YTO's single-ticket express delivery product cost in 2020 was 2.13 yuan, a year-on-year decrease of 18.12%, compared with the year-on-year decrease of 8.04% in 2018 and a year-on-year decrease of 14.03% in 2019. 2020 was the year-on-year decrease of its cost in the past three years, which is mainly due to YTO's investment in technology and the advancement of digital transformation.
In 2020, YTO has deepened the comprehensive digital transformation, making full use of the advantages of science and technology innovation platforms such as technology companies, national high-tech enterprises and national engineering laboratory , increased the intensity of scientific and technological innovation, and strengthened the application of emerging technologies such as big data, cloud computing , artificial intelligence , etc. From core systems such as "King Kong System", "Walker System", and "Automated Sorting System" to core platforms such as "Management Cockpit", "Substation Manager", and "Customer Manager", YTO uses digital tools to accurately control the entire life process of express parcels, which not only improves operational efficiency, but also successfully realizes fine control of costs.
Specifically, in the overall cost structure of YTO Express business, in addition to the delivery service expenditure, transportation cost and center operation cost are the two largest costs. YTO has achieved effective management and reduction of transportation cost and center operation cost by increasing the average number of car loading tickets and improving per capita efficiency.
Chart: Financial Industry Listed Company Research Institute Data source: YTO Express Financial Report
Financial report shows that in 2020, the average ticket volume of YTO train increased by more than 28%, and the per capita efficiency increased by more than 36% year-on-year. This makes the transportation cost of YTO single tickets in 2020, a year-on-year decrease of 26.29%; the operating cost of a single ticket center is 0.31 yuan, a year-on-year decrease of 13.41%. Empowered by digital transformation, YTO has effectively reduced operating costs through efficiency improvement, which is the core basis for its steady growth in performance under the fierce price war.
What digital transformation brings to YTO is not only the refined management of costs, but also the further improvement of service quality.Under the precise control of the entire life process of express delivery with digital tools, in 2020, YTO's customer complaint rate decreased by 19% year-on-year, and the express delivery loss rate decreased by more than 45% year-on-year. How to increase
? Aviation and international businesses have become new engines of growth. Infrastructure construction ensures the scale of capacity
2020 is a special year for the express delivery industry. On the one hand, due to the impact of the epidemic, the industry prosperity index in the first half of the year has been greatly reduced, and domestic and international transportation capacity has been greatly reduced. But on the other hand, under the catalysis of the explosion of online consumption, as an important channel connecting e-commerce and consumers, the express delivery industry has become the fastest-recovered industry. Statistics from the State Post Bureau, the national express delivery business volume in 2020 reached 83.36 billion pieces, a year-on-year increase of 31.2%, and business revenue was 879.54 billion yuan, a year-on-year increase of 17.3%, supporting online retail sales of more than 10 trillion yuan.
and Yuantong are in such "ice and fire" that they have used their advantages and made up for shortcomings, and achieved counter-trend improvements in various performance data.
Last year, when the domestic epidemic seriously affected passenger warehousing capacity and the global epidemic led to a significant reduction in international air flights, YTO, as one of the only two private express delivery companies in China with its own airlines, achieved good results through freight charter flights, which is also its most unique differentiated advantage over other express delivery companies.
financial report shows that YTO currently has 10 own fleets, with more than 2,000 international routes around the world. The route scope basically covers Southeast Asia, , Northeast Asia, and other regions, and its business scope covers more than 150 countries. During the epidemic, YTO Express International, a subsidiary of YTO Express, fully utilized this network and resource advantages to provide charter flights, transportation and other services to some domestic and foreign customers to meet the surge in procurement needs of medical supplies and other products in overseas countries and regions. In 2020, YTO Express International achieved business revenue of HK$5.048 billion and net profit of HK$252 million, a year-on-year increase of more than 800%. YTO Aviation achieved operating income of 1.193 billion yuan and net profit attributable to shareholders of 216 million yuan in 2020, an increase of more than 200% year-on-year, becoming an important support for YTO's revenue and profit growth in 2020.
In the strong recovery of the industry after the epidemic, YTO has ensured the capacity level under the explosion of business volume through accelerated investment in infrastructure construction. According to YTO, 2020 is also the year with the largest investment in capacity construction since its establishment. As of the end of 2020, YTO has a total of 75 hub transfer centers nationwide, implemented the transformation and expansion plan of 13 transfer centers, completed the relocation of 14 transfer centers, and laid out a total of 126 sets of automated sorting equipment in the transfer center, urban distribution center and construction and contract center, greatly improving the modernization and intelligence level of the transfer center.
Thanks to complete infrastructure construction and continuous capacity reserves, YTO's business completed 12.648 billion pieces in 2020, an increase of 38.76% year-on-year, the highest growth rate in the past four years, with a market share of 15.17%, an increase of 0.82 percentage points.
is underestimated? The annual and first-quarter results have increased. YTO has ushered in a revaluation of capital market value
Under a series of strategic results of reducing costs and increasing efficiency, YTO Express continued its previous strong performance in the first quarter of 2021, with revenue and net profit growth reaching 61.91% and 36.69% respectively. Looking at the top express delivery companies that have disclosed their 2020 annual report and the first quarter report of 2021, this is the only company that has continuously maintained rapid growth in revenue and net profit.
As the express delivery company with the highest performance in the industry, its price-to-earnings ratio is far lower than that of several other leading express delivery companies in A shares and Hong Kong shares . YTO Express is obviously undervalued in the secondary market. Needless to say, the performance of YTO Express in 2020 and the first quarter of this year is enough to illustrate the problem. From the perspective of underlying strength and development space, YTO's valuation is far more than that.
From the perspective of underlying strength, as of the end of 2020, YTO Express had 38,375 terminal outlets and more than 46,000 terminal stores. Through the "Express Delivery to Villages" project, it continued to deepen and expand the regional express service network of townships and villages. At the same time, YTO has 46 self-built sites around the world, with business scope covering more than 150 countries and more than 2,000 international routes.The domestic market has further sunk, and the international market service network continues to expand. In addition, the basic equipment of 10 self-owned fleets and 3,105 trunk transport vehicles ensures the expansion and growth of YTO's future scale and capacity from the bottom.
From the perspective of development space, as the development of the express delivery industry enters the second half, the head is locked, and the price war will no longer be the key to the decisive victory of the express delivery industry in the future, but cost control and service quality improvement are the core and foundation of competition and victory at any time. Pan Shuimiao, President of YTO, once said: "Express delivery companies cannot always rely on price wars, and they must eventually be productized. Now the era of making differentiated products has arrived." At present, YTO has achieved effective cost control and effective improvement of service quality through digital transformation. At the same time, YTO's construction in digitalization and informatization, as well as the improvement of management and services, has also given it the ability to create differentiated products.
It is reported that in 2021, YTO will comprehensively use digital tools to improve customers' all-round service experience, and deeply explore differentiated market needs, improve customer stratification and product upgrades, strengthen product innovation, and gradually establish a differentiated and diversified product system to accurately match customers' increasingly diverse express delivery products and service needs, and promote in-depth market expansion.
When it comes to differentiation, YTO's aviation business is undoubtedly its fundamental advantage that distinguishes it from other franchised express companies. Regarding the future plan of this sector, YTO stated that it plans to continue to introduce medium and large and long-range full-cargo aircraft, gradually adjust the fleet size, optimize the fleet structure, meet the needs of medium and long-range routes, improve the cargo capacity of International Airlines , further promote the participation of its own aviation in the international supply chain construction, and enhance the differentiated, international service capabilities and sustainable profitability of its own aviation.
In the long run, YTO Express deserves a higher valuation in the capital market, and perhaps this performance disclosure is an important turning point. It can be foreseen that in the future, as more and more investors see YTO's operating capabilities, profitability and development potential in counter-industry cycles, YTO Express is expected to usher in a new round of value revaluation.
After the release of this financial report, YTO Express's stock price fluctuated and rose today, with a maximum intraday increase of more than 3%. As of today's closing, YTO Express was 11.42 yuan per share, an increase of 2.51%.
